Bitcoin price correction was fierce, but short-lived. As this column is only updated every day or two, I don’t typically show short-term charts. But I thought this chart might be interesting for some who are following the column. This two-hour chart shows that the correction occurred almost exactly at the top of the 5th square of the setup.
Interestingly, the rallies also accelerated as soon as the 2nd and 4th arcs were cleared. The correction went exactly to the 1×1 Gann angle (45 degrees).
So we are once again confronted with the question: “What’s next?”
As usual, I don’t know anything for certain. But I can postulate guesses based on what I believe the charts are suggesting. For those of my readers of the column who are Elliott Wave traders, you can note that the correction also ended at the end of wave 4 of the wave up. Classic Elliot retracement. From an Elliott perspective, that move down could be ‘it’ or it could be wave A of an A-B-C. There might be another wave C down coming to end the correction. My guess is that there probably is, but I would never suggest shorting this market. Far too risky for my taste.
So, let’s move back to the daily and weekly charts for a clue.
It seems inconsequential at first, but for those interested, you will note that there are 2 spike highs at the beginning of the setup (1st blue arrow). I had been sizing the setup with the first of the spikes. When I ever so slightly changed the setup to the 2nd spike, the correction occurred at the exact top of the 4th square. We had a test of the 1×1 and 5th arc, both of which held. This is bullish.
The weekly chart, for those with a longer term trading horizon, is unquestionably bullish. It almost seems a certainty that the 3rd arc pair will be tested within the next several weeks (but NEVER SAY NEVER in this business). Once again, the $1020-$1030 range seems to be the target. However, remember that the 2-hour chart suggests that another test of the recent panic low (wave C) might be in the cards first.
Remember: The author is a trader who is subject to all manner of error in judgement. Do your own research, and be prepared to take full responsibility for your own trades.